Working Papers
Advocacy NGOs (with Elena Serfilippi)
Can NGOs make aid efficient in weak democracies? Traditional arguments state that NGOs can improve governance not only trough the provision of services like health and education, but also as advocates of the poor. It is expected that improvements in governance go against the personal interests of high-handed rulers. Tensions between autocrats and NGOs create a dilemma: if NGOs advocate to improve governance they might not be allowed in the country and thus cannot help. However, if they decide not to meddle in politics, it is likely that the aid they disburse will be captured by corrupt authorities.
Decentralized Aid and Democracy
The provision of foreign aid trough nongovernmental organizations has surged in the last few decades. Using a model of vote over public finances, I show that when private organisations deliver foreign aid, beneficiaries of this aid have incentives to reduce their electoral support for state-led redistribution. As a result, NGOs can crowd out governmental spending, turning private aid into a negative externality for the poor who do not directly benefit from it. The severity of this externality is larger when income distribution is unequal and when political power is skewed in favour of rich citizens. I model NGOs as confronted to a trade-off between saliency of needs addressed and the number of beneficiaries reached. Comparative statics reveal that if projects balance needs and reach, the externality will be larger, hurting the poor the most. Simultaneously, such equilibrated projects maximize aggregate welfare: objectives of fairness and efficiency become incompatible when providing private aid in democracies.
Encouraging Private Ownership of Public Goods: Theory and Evidence from Belgium (with Gani Aldashev, François Libois and Astrid Similon)
We study short-run and long-run effects of a government subsidy to private nonprofit ownership of public good projects. In a simple model, we show that the subsidy increases the prices of project assets in the short run; however, the effect does not persist and prices decline in the long run. This happens because the subsidy temporarily relaxes the resource constraint of non-profit organizations, which allows them to engage in supply-expanding activities. We test this prediction using a unique dataset that we have constructed from Belgian notarial land-transaction records and exploiting a policy reform in public subsidies for land purchases by non-profits aiming at creating privately owned natural reserves. Using the MS-estimation method (Maronna and Yohai, 2000) robust to outliers, we also provide a methodological contribution to the analysis of markets with quasi-donations.
NGOs, the Environment and the Struggle against Cocaine: Case Study of Bolivia
Stylized facts show that policies directed at reducing the production of coca leafs in the early 2000 had ambigous results: on the one hand many producers shifted to profitable non-coca crops, but this did not crowd out coca production. Instead, coca and their supposed substitutes increased simultaneously. I claim taht this effect arises from the type of organizations producing crops alternative to coca, usually cooperatives. Gains in productivity are meet with less hiring because cooperatives redistribute profits. In that sense, gains in productivity in alternatives to coca crowd-out labour, which in turns turns to coca production.
The Role of the Natural Resource Curse in Preventing Development in Politically Unstable Countries: Case Studies of Angola and Bolivia (with Saraly Andrade)
For about three decades now, development economics researchers have consistently claimed that third world resource-rich countries were not developing as well and/or as fast as they were expected to, given that their natural resources endowment was considered a great opportunity for development. The phenomenon of underperformances concerning primary commodity exporters relative to non resource-rich countries has been often referred to as to the “Natural Resource Curse”. The authors use an historical and political approach to the manifestations of the curse in the specific cases of Angola and Bolivia, both resource abundant countries, but suffering among the lowest development standards in their respective continents. In chapter one, the authors make a quick review of the literature explaining both causes and manifestations of the Resource Curse. The authors go beyond the classical Dutch Disease explanations and show how natural resources lead to behaviours of looting, rent-seeking and civil confrontations. In chapter two, the authors present the framework where they adjust the “African Anti-growth Policy Syndromes” described by Paul Collier to the specific case of the Natural Resource curse. In addition, they add some considerations of the negative effect of natural resource extraction by analysing externalities on environment, education and inequalities. Chapters three and four analyse the case studies of Angola and Bolivia respectively, emphasizing the role of historical context explaining policy behaviour and the critical impact of unexpected windfalls and sudden price collapses. The authors find that natural resources could sustain long lasting conflicts, but that conditions of fractionalization of society determine the possibility of conflict. A country divided in two rigid political factions is more prone to internal conflict, like in Angola, whether in countries where frontiers between blocks are blurried or the country is multi-polar, like in Bolivia, the risks of long-lasting civil war seem less important. Apart from conflict, the authors show that lack of institutions and inequality make of natural resources a source of political instability that has far more impact on economic performances than other factors.
Publications
Environement Naturel et Histoire de la Pensée Economique
Les Carnets du Développement Durable, Presses Universitaires de Namur (2013).
